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State To Take On Huge Foreclosure Fraud Scheme

DENVER (CBS4) - The state is suing three businesses and five people, accusing them of targeting desperate homeowners in one of Colorado's largest foreclosure fraud schemes.

It was a foreclosure scheme as elaborate as it is perverse. It involved at least 40 victims who lost not only their homes, but all the equity they had in them. Attorney General John Suthers says some of them had owned their homes for decades.

"It's really truly a tragic shame," Suthers said.

Suthers is suing the three companies involved -- Superior Financial, Platinum Financial and Fortunate Financial. He says they convinced people who were facing foreclosure to sign their homes over and then lease them back until they could repurchase them.

"And then, because they've got a deed to property, all have to do is evict them and they've stolen whatever equity they have," Suthers said.

In all, Suthers says the five men behind the scheme made off with $1.5 million in equity alone.

Liz and Juan Mendieta know the betrayal.

"People reach out because they're feeling desperate," Liz said. "Not sleeping at night, worrying all the time."

They too were taken by a company that promised to save their home and it nearly cost them.

"Finally somebody is doing something and they have to stop them," Juan said.

Suthers says he not only plans to stop them but to make them pay back what they stole.

The Mendieta's say it's more than a home.

"They were taking our dreams away," Juan said.

The five individuals named in these lawsuits are Patrick Brunner, Jason Lynn, Gregory Hoffman, Jerry Ohu and William Schultz. CBS was only able to reach Schultz for comment and he denied the allegations.

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